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Canadian Stocks Move Sharply Lower Amid Concerns About Global Economy

Following the strong move to the upside seen in the previous session, Canadian stocks have pulled back sharply in morning trading on Wednesday.

The S&P/TSX Composite Index has seen further downside after an initial slump and is currently down 213.00 points or 1.3 percent at 16,137.84.

The sell-off by Canadian stocks comes as a disappointing batch of Chinese economic data has contributed to a flight to safe havens such as U.S. treasuries.

With the increase in bond prices resulting in a drop in yields, the yield on the benchmark ten-year note dropped below the yield on the two-year note earlier this morning.

The inversion is widely seen as an indicator of a recession, although data from Credit Suisse shows the economic downturn typically does not occur until almost two years later.

The yield on the closely watched thirty-year bond has also shown a notable decrease, tumbling to a new record intraday low.

Energy stocks have helped to lead the way lower amid a steep drop by the price of crude oil. Crude for September delivery is plunging $2.06 to $55.04 a barrel amid concerns about global energy demand.

Substantial weakness has also emerged among healthcare stocks, as reflected by the 3.2 percent nosedive by the S&P/TSX Capped Health Care Index.

Technology, financial, and consumer discretionary stocks have also shown notable moves to the downside amid broad based weakness.

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